Sales Person Commission Setup

Owned by Stephen Juliano (Unlicensed)
Last updated: Jun 23, 2022 by Colleen Juliano
12 min read

Table of Contents

Overview

TRX Enterprise has robust commission tracking abilities that span over three modules.  The user will have control over what commissions are calculated on, who gets commission for what invoice as well as when and how commissions are paid out.  We even give you a commission suite to adjust, update and print out commission reports.

Detail

Setup

Before we go into how commissions work in TRX we must first set the modules up to calculate them.  We have setup points in the following modules.

  1. Order Entry Setup Screen

  2. AR Setup Screen

  3. POS Setup Screen

  4. Order Entry Salesperson and Commission Screens 

Commission Calculations

There are multiple ways that commission calculations and percentages default into an order, they have a hierarchy to establish which one gets used and when.

  1. Order Entry

  2. POS

  3. Projects

  4. Split Commissions

Commission Reporting

TRX has a commission suite that will allow management to edit commissions if needed and report on and update the reporting of commissions based on when they were earned.

  1. Adjust Commissions

  2. Commission Report

  3. Update Commissions

 

Order Entry setup points for Commissions

ORD > Order Entry Special Functions > Order Entry Setup | General
ORD > Order Entry Special Functions > Order Entry Setup | Control Points

  • Multiple Salesperson – With TRX you can have multiple salespersons receive commissions on a sales order.  This feature has two important caveats that must be understood before deciding to use.

    • First and most important at the current time this feature is not supported in the POS or Projects module it is only for order entry.  You can have it turned on and use commissions in POS and Projects, but the advanced, split commission feature is not available.

    • A line item on an order will only have one commission percent applied to it.  That percent will figure the total commission that is to be paid out for that line.  The multi-commission option will then split that total commission by a pre-defined percentage per salesperson.

Example: There is a ten percent commission on a one hundred dollar order.  The total commission would then be 10 dollars.  Salesperson A gets 60% or 6 dollars and Salesperson B gets 40% or 4 dollars.  In split commissions the total percent of the salespeople must always equal one hundred percent.

  • House Salesperson – Most users will use the house salesperson as a salesperson that does not receive commission or a salesperson that has a zero percent commission rate.

  • Update Cost from Inventory when invoicing - At first glance this may not seem to effect commissions in any way, however a good salesperson will always know exactly how much they are making on a sale.  If your commission percent is based off of margins and this box is checked you must be prepared to explain how the cost of the item suddenly changed from the time the salesperson sold the item to the time it was invoiced.

  • Default Commission Calculation – This box in AR setup will let you decide how you want to calculate your commission amounts on the sales order.  The commission amounts are figured on a line item basis and not on the order total.  Above are the options available to you.

Important note:  This is a default value; this will be over written if you use an item specific commission rate from the Item commission setup screen.  There is a hierarchy that will be covered a little later.

  • Default Commission Percent – The default commission percent is the lowest priority of commission.  In the event that there is not a default commission calculation or an individual Item Commission the default commission rate will be applied.  It is a last resort option.

  • Commission on Shipping – Check this box if it is your practice to pay out commission on shipping charges.

 

AR Setup screen entries for Commissions

  • Pay commissions on Debit and Credit Memos – If this box is checked sales people will get commissions or commission reductions on all debit and credit memos (with the exception of those created in cash receipts) 

  • Pay commissions on Debit and Credit Memos in Cash Receipts - If checked salespeople will get commissions on credit and debit memes that are created in cash receipts.  

We separate cash receipt debit and credit memos from regular debit and credit memos.  More often than not the debits and credits from cash receipts are due to write offs and therefor some do not want them classified as regular memos for commission purposes.

 

POS Setup Screen Commission Setup Entries

Use customers default sales person – This check box will define if you use the customers default sales person or if you use the register user as the salesperson of commission record.

  • If unchecked the register user becomes the salesperson of record instead of the customers default salesperson.

 

Sales Person Set Up for Commissions

Part of setting up commissions is setting up the sales person.  In sales person set up you will control the percent of commission the sales person will get from a line item for both regular and drop ship orders.  To do this you need to go to the Order Menu under sales person entry Query.

ORD > Salesperson and Commissions > Salesperson entry/query 

To start entering a salesperson you should place your cursor on an open Salesperson Number box or press the insert record icon  to create an open field. 

  • Salespersons Number – The sales person number can be an alpha or numeric code that will represent the salesperson on all AR entry fields. 

  • First & Last Name – This will be the real first or last name of the sales person and it will populate into the description box whenever you use the salesperson code.

Pressing tab or enter after typing the last name will take you to the commission tab.  The “active” check box will default to the checked position.  Un-checking this box will cause the salespersons code not to be available when you use the F9 button for a list of variables for salespersons fields...

  • Accrual Account – Here you will place the default commission accrual account, this account is usually a cost of goods sold expense account for commissions

  • Expense account – This is the expense account for commissions and quite often is the same as the accrual account.

Note: The Accrual and Expense accounts will default in from the order entry setup screen; if they are not set up there they should be setup at this time.  They can be changed if needed.

  • Commission percent – This is where you would add the commission percent for regular orders for that salesperson.

  • D/S Commission percent – You have the option of setting a separate commission rate for drop ship orders.

Note: 10.0000 would represent a ten percent commission. 

After adding your commissions and entering you will be taken to the contacts tab.  Here you will enter:

  • Phone – the salespersons phone number

  • Fax -  the salespersons fax

  • Email address – The salespersons email address.

The next tab you will run into is the buyer XREF; it is here that you can assign a default buyer to a salesperson.  On a drop ship or gen PO order there is a PO details tab.  On that tab a buyer is declared.  If you would like a buyer to default in to that field for a salesperson this is where you would set that up.  A buyer is required in the PO screen, and it can be changed if needed.

  • Buyer – Buyers must be setup in purchasing special functions ahead of time, in the buyer field you can type in the buyer code or press the f9 for a list of options. 

After the buyer X-ref you will be directed to the POS tab this is where you can set up a salesperson’s POS permissions. 

  • Password – Some will elect to have their POS systems password protected, this allows for tighter user tracking when multiple people are using the same register.  Individual passwords for POS are set up and stored here.

  • Max Discount – You have the ability to set individual max discounts for each POS user.  In this field enter the discount that you would like to give the salesperson.

  • Cash Out – Give this user the permission to handle register cash outs

  • Close register – Here you can give the user permissions required to close the register.

  • Accept Returns -  Checking this box gives permissions to accept returns

The last two tabs that you will need to fill out for the salesperson are the comments and the Invoice comments tabs.

  • Comments – Here you can enter comments about the sales person.

  • Invoice Comments - If the salesperson would like personalized comments to print on Invoices they can add them here.

 

Commissions Calculations – Order Entry

In order entry Commissions are calculated on a line item basis.  A customer will have a default salesperson attached to them that will populate into the order entry screen.  Whether this salesperson is changeable, changeable with a mangers override or locked is a setup function that is controlled in the module setup screens.  There are several factors to consider when looking at an orders commission. 

 

Commission Calculation – This is how the amount of commission is calculated per line item on an order.  With some setups this can be edited on the order but with others it will default in.  There are two levels of commission calculations or for lack of a better term; a default calculations hierarchy.

  • Level #1 – In the order above items 2 and 3 there was a specific commission amount set up for those items in the ORD > Salespersons and Commissions > Item Commissions Entry.  Whenever there happens to be a specific commission assigned to an item it will override the default from Order Entry Setup.  This function can be used if you would like to assign a higher commission to promote an item as in a spiff or to move dead inventory.  Items assigned commissions will trump all

 

  • Level # 2 – When an item does not have a specific Commission Calculation assigned to it TRX will default to the “Default Commission Calculation” that was set in Order Entry Setup screen.  Therefor in this example the percent of gross margin was entered automatically.  This is the most common way to attach the commission calculation to a sale. 

        

It is important to note that this is only for how the commission will be calculated this does not affect whom it goes to and what percentage that will be used.

  • GM Modifier – The Gross margin Modifier is a way to add a load to a commission.  Some companies that pay out large commission percentages will add a load (charge) to the commission that goes to the company.  You set a default Gross margin Modifier in Order entry setup.

    • Example – company A will pay out 30% commission on a sale but the will charge the salesperson a 2 point load on their commission for administrative charges.  Therefor the order will figure the commission at 28% instead of thirty.  (The 2% will not be diverted to a load GL account it is simply not calculated.) 

  • Amount or % - This is the field that controls how much commission a salesperson will get.  The commission percent or amount (it can be a dollar amount) will get populated with the same hierarchy as commission calculations, with one addition.  If there is no Item commission set and the salesperson does not have a commission percent declared in the salesperson setup screen TRX will look to the “Default Commission Percent” in Order Entry Setup.

    • There for commissions are calculated as follows:

  1. By the items assigned percentage.  -If none exists

  2. By the salespersons assigned Percentage.  -If none exists

  3. By the default percentage setup in Order entry Setup 

  • Commission – This box has the total commission for the line item, that total will show up on the commission reports.  If the system is set to use multi-salespeople then this is the number that will get divided between the salespeople at their assigned percentage.

 

Commissions Calculations in POS

You can also assign commissions to POS orders.  Unlike sales orders you cannot use the multi-commission function of TRX, but there are ways to create multi-commissions on an order.  Aside from the multi-salesperson exclusion; commissions will work the same way in POS as they do in order entry.  The commission will be based off of the salesperson that is placed on the order.  You will not be able to view any commission information on a POS order as you can a sales order, but all POS transactions create sales orders that can be queried for viewing purposes.

 

Depending on your TRX setup choices the Salesperson can be changed on a POS transaction.

 

Commissions on Projects

Projects like the POS module cannot use the advanced multiple salesperson commissions option.  There is a way around this that will be covered later.  You can still use the projects with the “multiple sales person” set up box checked, you will not however be able to split the project commission calculations through TRX.  To split project commissions you will need to use the dual salesperson code method explained later.

 

Split Commissions

There are two basic ways to handle split commissions in TRX Enterprise.  For those who predominantly use the order entry screen we have a Multiple sales person function that you can turn on in AR > Special Functions > AR Setup.  You can have this turned on and still use Projects and POS but the Multiple Salesperson Function does not carry over into those modules.  For the users that would like multiple commissions on POS and Projects we suggest creating dual salespersons codes.  This method is a little more manual then the multi -salesperson function but is viable in POS and Projects.

Multiple Salespersons

It is possible to have multiple salespersons assigned to a customer.  This feature must be turned in the Order Entry setup screen by checking the, “Multiple Salespersons” tabs.  When this feature is turned on a tab is displayed in the Order Entry screen.  Each of the salespersons listed on this tab will then receive commission for sales orders to this customer.  For each salesperson you indicate the percentage of the total commission to be paid to the individual salesperson.  This should not be confused with commission percent, which is used to calculate the commission on a sales order.

The Multi-Com tab will only become available when the “Multiple salespersons” box is checked in the Order entry setup.  You will enter an order as normal and a default salesperson will populate in.  Before processing the order if you would like to take advantage of the Multi-commission tab you will need to open and enter the sales people that will get commission on this order and the percentage of the commission they will get.  In the example above the order had a $18o.oo commission on it.  But Ron and Glen split that 80/20. 

Note: When using the Multi-commissions tab the salespeople’s percentages have to equal up to 100%.

On our Commissions report we will break the commission out buy customer and salesperson.  So when you print out a commission report for Ron Fox you will only see his portion of this commission.  But if you print by customer you will see both salespeople and their commission percent.

Commission by Customers

Commission by Sales Person

 

Dual Sales Persons Codes

The alternative to using the multiple sales person option in Order entry set up is to create dual salespeople.  As an example: if user A runs the register and there are four salespeople in your organization.  To split commission between the register user and the sales person you could create a salesperson code that was user A and Sales person B together.  This would separate the sales on the commission reports for Salesperson A-B from the rest.  The register user would need to change the salesperson on the POS sales screen and management would be required to figure the split manually from the commission report totals but this will be quicker than running all orders manually and figuring the totals out.  This method is used by many users.

The same order from the first example could have been run with salesperson code G/R which is the Glen Ron Split.  The commission report would have listed the sale under salesperson G/R for $180 commission.  The user would then have to calculate the 80/20 split manually.